- Hyphens Pharma announced the acquisition of the remaining 58% stake in associate Ardence across three tranches, to be fully completed earliest by FY26F. Hyphens Pharma’s existing 42% stake in Ardence Pharma was a result of Hyphens Pharma’s acquisition of Novem in end-FY21.
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Financial impact from the acquisition of Ardence Pharma
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- The first tranche of the transaction, which will see Hyphens Pharma’s stake in Ardence increase from 42% to 65% for a consideration of ~S$1.9m, values Ardence at S$8.1m, or an implied FY22F P/E of ~9.9x, and is expected to complete by end-FY23F.
- According to management, it would be fully funded by cash out of Hyphens Pharma’s net cash of S$28.6m (as of 1H23).
- We think that valuations are attractive, given Ardence’s superior net profit margin of 29.4% to Hyphens Pharma’s 7.0% in FY22, as well as stronger growth potential, which saw Ardence’s revenue and net profit double y-o-y from FY21 to FY22, according to management during the analyst briefing held on 20 Oct 23.
A strategic asset to grow Hyphens Pharma’s medical aesthetics business
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